Last year, a contract for a 900-1,000MW coal plant in Lamu on Kenya’s north coast was awarded to Kenya’s Centum Investment and energy solution company Gulf Energy Ltd, under a Build, Own and Operate (BOO) regime.
The Sh180bn ($1.78billion) coal project will initially run on South African coal supplies, switching to Kenyan coal deposits that are currently undergoing exploration in Kwale, Taita Taveta and Kilifi counties.
Amu Power Company Ltd, incorporated by the Gulf Energy-Centum consortium, is expected to produce 981.5MW of electricity – approximately 40% of Kenya’s electricity demand. The company will operate the plant under a 25-year power purchase agreement with Kenya Power.
Delivery expectations by 2018
Joseph Njoroge, principal secretary at the energy ministry, said: “The financial close was established last month, so I would expect in three years’ time, by 2018, we will have the power plant running.”
Coal from Kenya’s Kitui region would be used at the Lamu plant in future but developing the reserves and building a 250km railway line to the plant would take about six years, stated The Africa Report.
World Bank warns against coal
Rachel Kyte, the World Bank’s Vice President –Special Envoy to Climate Change, said there are many options within East Africa that a country such as Kenya can explore rather than coal, reported The Standard Kenya.
Kyte said: “Extraordinary resource are under exploited like geothermal, hydro resources, remarkable solar and wind resources. For example, Kenya can exploit gas and oil found in Turkana, hydro from Ethiopia, and from Rwanda within East Africa.”
She added that since African countries are just beginning to realise fossil fuels, they have an opportunity to build development pathways through cleaner energy different from developed countries.
Social cost of coal
Kyte continued: “Using cleaner energy should be an opportunity not a burden. If you grow cleaner energy [generation capacity], there will be safer jobs than in a brown economy.
“There will be less polluting hence fewer diseases. Carbon has a social cost as well as emission impact. If you can grow without the social cost, then your healthcare cost won’t be paid from illness emanating from carbon [emissions],” Kyte said.
According to The Standard Kenya, Kyte advised that the international community has an obligation to help Africa explore the cleanest options of energy. In addition, countries should be incentivised to use clean energy options and that those insisting on carbon should know that taxes are being put on carbon.
By way of example, Kyte noted that this has already begun, citing South Africa’s intention to introduce carbon taxes in 2016.
“When making investment on clean or fossil fuel technology, think about cost of any lifetime power plants being made now since the carbon will have a price and steadily rise”, Kyte concluded.